Latin American countries have historically experienced relatively high inflation, and their currencies have weakened. This information is somewhat consistent with the concept of:

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This information is consistent with the concept of purchasing power parity (PPP) because high inflation and weakened currencies imply that the domestic prices of goods are increasing at a faster rate than in other countries, and therefore the domestic currency's purchasing power is decreasing. PPP suggests that in the long run, exchange rates should adjust to equalize the prices of an identical basket of goods and services across countries.

Latin American Countries Have Historically Experienced Relatively High Inflation, and Their